December 23, 2008

Racing Recession

Porsche, Honda, Subaru and Suzuki have all pulled out of various racing series due largely to the recession. It appears that economic conditions just further emphasized how pointless much of the spending in racing is. Nascar is hurting, as are every series. Teams are finding it harder than usual to find sponsorship.

The underlying issue isn’t the recession. Even in good times it’s hard to justify the sums spent on racing by the manufacturers. In Formula One it’s in the neighborhood of hundreds of millions of dollars per year for many of the teams.

The complexity of minutia drives the cost up exponentially compared to lesser, though no less exciting, series. The solution, which the FIA have continually attempted to implement, is to reduce cost. But the reason they have failed to do is because their rule changes tend to INCREASE complexity and further increase cost.

Further, the idea of a budget cap as once proposed is preposterous. It is unenforceable and resources will just be diverted elsewhere because the governing body does not have control of the teams. The teams will spend whatever they can, cap or no cap. The organizers have not been able to eliminate the incentive for the teams to participate in an “arms race”.

It appears now that there will be some reduction with the introduction of “customer” engines, though that is also partly offset by the added expense of KERS.

For auto racing to survive it has to improve the quality of racing while keeping budgets reasonable and stable.